Sumitomo Metals Posts 78.6% Higher Profit in F2011

Sumitomo Metal Industries announced on Friday the firm posted 60.8 billion yen of consolidated recurring profit for fiscal 2011 ended March 2012, which was 78.6% higher than fiscal 2010 level and higher than 55 billion yen outlook as of February. The net loss was 53.7 billion yen due to 112 billion yen of onetime loss mainly for securities valuation loss and disaster related loss. The firm posted net loss for 3 years in a row. The firm tries to realize around 30 billion yen of cost reduction for fiscal 2012 compared with more than 42 billion yen for fiscal 2011. The firm failed to disclose fiscal 2012 targets citing uncertain raw materials cost and steel price.

The recurring profit increased by 26.7 billion yen from fiscal 2010 to fiscal 2011. The positive factor of total 195.6 billion yen including 128.6 billion yen from higher price and better products mix was higher than total 168.9 billion yen of negative factors including 131 billion yen of higher raw materials cost.

The steel unit posted 17.9 billion yen of operating profit for January-March, which was 2.2 billion yen higher than October-December 2011 level. The raw steel output increased by 110,000 tonnes to 3.36 million tonnes while the steel selling price decreased by 3,300 yen to 99,800 yen per tonne. The export rate decreased to 41% in January-March, 40% in second half of fiscal 2011 and 41% for the full year compared with 42% in first half of fiscal 2011 and 42% in full year fiscal 2010.

The firm expects around 3.1 million tonnes of raw steel output in April-June, which is 200,000-300,000 tonnes lower than January-March due to slower general steel demand and lower automobile output.

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